The upper end of the international private medical insurance market has been in the headlines throughout 2015 – but what options are available for individuals whose pockets aren’t so deep? Harvey Jones reports
Once again the super-wealthy have been hogging the limelight when it comes to international private medical insurance (iPMI).
The industry has been dazzled by benefits-rich “platinum” iPMI plans offering everything from higher maximums to concierge services, at the expense of the humble budget iPMI plan.
As the old song tells us, it’s the rich what gets the pleasure, it’s the poor what gets the…well what exactly?
No individual buying iPMI can be classified as poor, but there is no doubt that they are poor relations.
They will still want the best possible cover, while keeping costs to a minimum.
Travel insurance may be a cheaper option for workers who make only short, occasional trips overseas, giving them cover against medical and other emergencies, but it is no long-term solution.
Most annual multi-trip policies, for example, will only cover travellers up to a maximum 30 or sometimes 60 days per trip.
TRAVEL OR IPMI?
Joe Coleman, head of individual business at Allianz Worldwide Care, says people who live or work outside the UK for a sustained period need iPMI.
“Travel insurance usually only provides cover in case of an accident or a sudden onset of a medical condition that requires immediate treatment,” he says.
“By contrast, iPMI provides cover for emergency and non-emergency or planned treatment, as well as day-to-day costs such as GP visits and dental work.”
As an added benefit, members also have the option to receive treatment anywhere within their region of cover.
Kevin Murdoch, senior proposition development manager at Aviva UK Health, warns that any expat who is tempted to make do with travel insurance must be clear on the requirements of their destination country.
“For example, some countries in the Gulf insist on comprehensive cover to comply with visa regulations,” he explains.
The other danger with travel insurance is that it could leave the client with only limited cover in an emergency, Murdoch says.
Alison Massey, marketing and ecommerce director at Now Health International, says one of the most important iPMI features is that it provides cover for major medical events.
“Cancer or kidney failure can cost upwards of $100,000 to treat, and even budget-level iPMI plans will cover this sort of treatment,” she says. “Travel insurance, on the other hand, limits cover to medical emergencies and possible evacuation or repatriation. Even then, benefit levels plans are low compared to iPMI.”
Massey says that until recently most expats posted overseas were given comprehensive cover as part of their employment contract, but those days are over. “Now it is more common for people to start searching for cover when they arrive in their new country,” she says.
“Many choose budget plans that still provide top-end cover for catastrophic medical events but not for more elective medical treatment such as non-emergency maternity and dental.”
David Healy, general manager for Europe at Aetna International, says iPMI and travel insurance are two different types of insurance with little crossover.
“Travel insurance is designed to cover short-trip emergency healthcare, iPMI provides broader healthcare protection wherever the expatriate lives or travels,” he says.
Most iPMI insurers, including Allianz, Aetna and Aviva, help clients manage costs by offering modular plans starting with a budget option and building up to fully comprehensive.
Healy says this allows the client to choose a plan that covers what matters most to them.
“At Aetna, a client can choose a budget plan, for example, and add cancer cover as a specific option if they wish,” he explains.
Excesses and deductibles can also make access to quality healthcare more affordable, he says.
“Combining higher excesses with a budget plan gives expatriates the protection of iPMI but with more modest premiums,” he says.
Healy says special offers can help.
“For example, when clients take out the Aetna plan with standard excesses per condition we waive the excess when they use a medical facility in our network. This allows the member to benefit from, what is effectively, nil excess cover at reduced cost,” he says.
Angus Slater, marketing director at Bupa Global, says its research shows that customers want simple pre-designed products with tiered coverage, pricing and service, which makes it easier to select the most appropriate level of cover for them.
BUPA meets this need by offering four tiered options: Global Select, Premier, Elite and Ultimate.
Slater says that Bupa Global Select Health Plan would cost a 30-year-old man based in the UK and with no pre-existing medical conditions around £2,383 a year.
“All of our products, from Select to Ultimate, are designed to cover all-round healthcare at home and abroad,” Slater says.
BROKERS ARE KEY
Specialist iPMI insurance brokers have a key role to play guiding their clients through the various plans and premium choices.
Sarah Dennis, head of international at The Health Insurance Group, winner of this year’s Health Insurance Best Group International PMI Intermediary Award, says: “The most fundamental point is to fully understand the client, their needs and their budget. Also, consider the location they are relocating or travelling to on a regular basis.”
She says options for cutting premium costs include inpatient-only policies, excluding cover such as dental, wellness and maternity, or paying monthly instead of a single annual payment.
“Really taking the time to educate your clients and fully explain what is out there is crucial,” Dennis says.
Policies with more limited cover levels can still give the client valuable piece of mind, Dennis says.
“Even if that means emergency treatment only that still means they are protected against the huge potential costs of proceeding uninsured,” she explains.
Before recommending a budget plan, the broker must check that it complies with local visa requirements and health authority regulations in their destination countries.
Dennis says in some cases local healthcare may be the better option.
“Especially if the client has no intention of returning to their home country for treatment or has a really tight budget,” she says.
Andrew Apps, head of global healthcare at specialist insurance intermediary firm Bellwood Prestberry, says inventive brokers can find other ways of cutting premiums, such as self-funding.
“One route is to look at the cost of medical care where you are living to gauge whether some of the more basic elements can perhaps be paid for in cash instead of being reimbursed by the policy,” Apps says.
“For instance, in many countries outside Europe prescription drugs can often be bought over the counter relatively inexpensively. Also, the cost of seeing a doctor for day-to-day ailments can amount to just a few dollars. Dental care can also be inexpensive.”
Apps says that medical costs vary from country to country and even from city to city. “It is worth asking your local private medical provider what they would charge for a range of basic services to see whether some of these could be self-funded.”
This way, the iPMI premiums could be used to fund more serious and expensive treatment such as inpatient services, cancer and chronic care.
Apps says: “This can offer a considerable saving whilst still maintaining the higher benefit limits that are often lost on so-called budget plans.”
He says the big quiz question is: which benefits can you safely remove?
“Maternity care is one obvious benefit, and in some cases emergency medical evacuation cover,” he says. “If you are living in continental Europe or a major metropolis such as Hong Kong or Singapore where high quality medical care is readily available, the chances are this is a benefit you’ll never need.”
Apps adds: “Budget plans needn’t mean poor cover if you take a moment to find out what you really need and what you don’t.”
Steve Nelson, product development manager at Medibroker, says not all expats earn large tax-free salaries and affordability is a big issue for them.
He picks out a couple of insurers who have lower cost plans for those in low-income jobs overseas.
ALC Health’s Prima Concept Plan would give a 35-year-old-teacher in Nepal up to £250,000 of total annual cover for £120 a month, with no excess. That falls to £95 a month with a £300 a year excess.
Nelson also picks out Morgan Price’s Standard Plus plan, which would offer the same teacher £750,000 total cover a year for £92.37 or £83.13 with an annual excess of £250.
IMG Europe’s Globalfusion Silver plan offers £2.75 million lifetime cover for £98 a month or £52.20 with a £250 annual excess.
Nelson says: “There is quite a difference in premiums and suitability will depend on the circumstances of the individual. They also need to be sure they can fund the excess.”
One downside is that cheaper plans are unlikely to provide any cover for pre-existing medical conditions, he says.
“The client could end up paying for treatment from their own pocket, so that the plan ends up costing them more,” he says.
Although choosing a budget plan does rob clients of the pleasure of a fully comprehensive iPMI plan, it should still spare them a lot of financial pain if they fall ill overseas.
As Nelson says: “At the end of the day, it is always better to have some cover than none at all.”